Cracks in the Great Wall
By Steve Christ
When it comes to the incredible economic growth story being written in China these days, the numbers--like the country's population--are simply off the charts. According to the data, the economy of the land of the dragon continues to grow at the massive rate of over ten percent per year, with no end in sight. In terms of GDP, that's the amazing and unfathomable equivalent of adding a city the size of Philadelphia every month.
It's that type of growth that has made comparisons to our own country at the turn of the last century practically inevitable, but also richly deserved.
But unfortunately for the Chinese and for U.S. consumers, that type of explosive growth has also drawn comparisons to a chapter in our own history that we would sooner forget--a time when the safety of our food products was called into question.
Tales of tainted pet foods, toxin-coated monkfish, drug-laced frozen eel, pesticide-laden mushrooms, and dangerous toothpastes are reminiscent of where we found ourselves at the turn of the last century.
The difference, of course, is that here in the States a free press was able to uncover and expose the nasty conditions in food production that existed at the time.
Among the "muckrakers," as they came to be known, was Upton Sinclair. His famous work "The Jungle" exposed the filth and wretched conditions of the meat packing industry in 1905.
A commentary on the nastiness of the working conditions and the exploitation of women and children, it was Sinclair's description of the abhorrent conditions within the meat packing plants that gripped the nation. His description of the unfortunate workers who fell into machinery and were later turned into "Durham's Pure Leaf Lard" was by far the most revolting and influential passage in the book.
In fact, upon reading it President Teddy Roosevelt was so sickened that he ordered a full investigation of the industry. The details of how hogs and cattle were being sliced into pork and beef and how much of that condemned meat was ending up on American dinner tables were simply too much to be ignored.
Roosevelt, of course, was not alone. Foreign sales of American meat fell by one half in the wake of Sinclair's defining work.
The resulting investigations led to the quick passage of the Meat Inspection Act and the Pure Food and Drug Act of 1906 in order to calm the public outrage. The establishment of the Food and Drug Administration quickly followed.
When it comes to the incredible economic growth story being written in China these days, the numbers--like the country's population--are simply off the charts. According to the data, the economy of the land of the dragon continues to grow at the massive rate of over ten percent per year, with no end in sight. In terms of GDP, that's the amazing and unfathomable equivalent of adding a city the size of Philadelphia every month.
It's that type of growth that has made comparisons to our own country at the turn of the last century practically inevitable, but also richly deserved.
But unfortunately for the Chinese and for U.S. consumers, that type of explosive growth has also drawn comparisons to a chapter in our own history that we would sooner forget--a time when the safety of our food products was called into question.
Tales of tainted pet foods, toxin-coated monkfish, drug-laced frozen eel, pesticide-laden mushrooms, and dangerous toothpastes are reminiscent of where we found ourselves at the turn of the last century.
The difference, of course, is that here in the States a free press was able to uncover and expose the nasty conditions in food production that existed at the time.
Among the "muckrakers," as they came to be known, was Upton Sinclair. His famous work "The Jungle" exposed the filth and wretched conditions of the meat packing industry in 1905.
A commentary on the nastiness of the working conditions and the exploitation of women and children, it was Sinclair's description of the abhorrent conditions within the meat packing plants that gripped the nation. His description of the unfortunate workers who fell into machinery and were later turned into "Durham's Pure Leaf Lard" was by far the most revolting and influential passage in the book.
In fact, upon reading it President Teddy Roosevelt was so sickened that he ordered a full investigation of the industry. The details of how hogs and cattle were being sliced into pork and beef and how much of that condemned meat was ending up on American dinner tables were simply too much to be ignored.
Roosevelt, of course, was not alone. Foreign sales of American meat fell by one half in the wake of Sinclair's defining work.
The resulting investigations led to the quick passage of the Meat Inspection Act and the Pure Food and Drug Act of 1906 in order to calm the public outrage. The establishment of the Food and Drug Administration quickly followed.
But while we managed to clean up the problems with our own food production over a hundred years ago, the dangers that we now face from the more than $2 billion dollars of food imports that we receive every year from China are just beginning to come to light.
The recent closure by government officials of 180 food factories in China only points to a much larger, unappetizing problem.
Prompting the closures, formaldehyde, illegal dyes and industrial wax were found being used to make candy, pickles, crackers, and seafood in those plants, according to Han Yi, an official with the General Administration of Quality Supervision.
"These are not isolated cases," said Han, leading to further speculation, since its estimated that there are one million small and privately owned food processing plants in China today that go without much regulation.
Not surprisingly, China only accused the media of hyping its problems.
"I think it would be better if the media would stop playing up this issue," said Foreign Ministry spokesman Qin Gang recently. But given the stakes, he is not likely to get his wish.
So what do all of these problems have to do with the markets?
Well, quite a bit, actually, because dangerous Chinese imports are an issue that is impossible for us to ignore--be they dangerous tires or tainted food.
It's exactly the type of issue that could create much greater trade tensions in the future, and even spiral out of control if substandard Chinese products lead directly to consumer deaths.
It's an issue that is simply impossible for either government to finesse. That's what makes it so potentially disruptive.
In fact, in Washington the war of words has already begun.
"I think that we have reached the point, unfortunately," said Sen. Dick Durbin recently, "where 'Made in China' is now a warning label in the United States."
Now whether all of this tough talk will lead to a trade war in the future remains to be seen. But I'd feel a lot better about it if the Chinese had some muckrakers of their own.
The recent closure by government officials of 180 food factories in China only points to a much larger, unappetizing problem.
Prompting the closures, formaldehyde, illegal dyes and industrial wax were found being used to make candy, pickles, crackers, and seafood in those plants, according to Han Yi, an official with the General Administration of Quality Supervision.
"These are not isolated cases," said Han, leading to further speculation, since its estimated that there are one million small and privately owned food processing plants in China today that go without much regulation.
Not surprisingly, China only accused the media of hyping its problems.
"I think it would be better if the media would stop playing up this issue," said Foreign Ministry spokesman Qin Gang recently. But given the stakes, he is not likely to get his wish.
So what do all of these problems have to do with the markets?
Well, quite a bit, actually, because dangerous Chinese imports are an issue that is impossible for us to ignore--be they dangerous tires or tainted food.
It's exactly the type of issue that could create much greater trade tensions in the future, and even spiral out of control if substandard Chinese products lead directly to consumer deaths.
It's an issue that is simply impossible for either government to finesse. That's what makes it so potentially disruptive.
In fact, in Washington the war of words has already begun.
"I think that we have reached the point, unfortunately," said Sen. Dick Durbin recently, "where 'Made in China' is now a warning label in the United States."
Now whether all of this tough talk will lead to a trade war in the future remains to be seen. But I'd feel a lot better about it if the Chinese had some muckrakers of their own.
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